The global pipeline is close to empty, even as there remain many conditions resistant to current treatments. So future discoveries will be more effective, and more remunerative
Studies indicate that drug discovery in India can be 80-90 per cent cheaper than in developed markets

Indian pharma companies have built competence in chemistry, by copying drug processes of multinationals
Chemistry capabilities are cheap and world-class

...BUT THAT DOESN'T MEAN THE MAGIC MOLECULE IS ROUND THE CORNER

Compared to their Big Pharma counterparts, Indian drug companies still have a long way to go, with just a handful progressing to clinical trials
Indian companies-other than Dr Reddy's-have yet to deal with failure, which in the long run means a proportionate increase in discovery costs

Indian Pharma is still minuscule compared to Big Pharma, so investments will always be a constraint. Licensing out discoveries for development and marketing to international majors is inevitable, which in turn means sharing the spoils
Indian skills are world-class, but the skill-sets are limited and restricted to a few therapeutic areas

IF YOU THOUGHT THE DRUG DISCOVERY PROCESS IS TOUGH...

Period: Up to 6 years
Cost: Roughly $60 million
Odds of drug reaching market: 1: 10,000

IDENTIFYING & VALIDATING TARGETS: This involves developing the concept of how a new drug can treat a disease. Compounds that should be pursued further are shortlisted

SCREENING: Compounds that have desirable potencies and that react encouragingly are pulled out. These are the 'Hits'. Converting Hits into 'Leads' calls for further refinement in the compound, during which solubility, toxicity (quantity of safe doses), absorption, metabolism etc., are tested, even as the potency and activity are maintained

...WAIT TILL YOU REACH THE STAGES OF DRUG DEVELOPMENT

Period: Up to 12 years
Cost: Up to $200-250 million
Odds of drug reaching market: 1:200

PRE-CLINICAL TRIALS: Toxicity and pharmacokinetics (absorption, distribution, metabolism, elimination) are observed via tests in labs and in animals

IND FILING: Company files an application for an investigational new drug (IND) with the FDA. This filing includes results of pre-clinical trials and the plan for human clinical trials

PHASE I TRIALS: Conducted on 20-100 healthy volunteers to prove safety. Once molecule enters clinical trials, odds of success drop to 1:5

PHASE II TRIALS: 100-300 persons suffering from the disease are treated. Considered by many companies as the stage to opt for licensing agreement

PHASE III TRIALS: Involves between 1,000 and 5,000 patients in a bid to verify previous trials

NEW DRUG APPROVAL FILING: FDA reviews information, and if satisfed gives its approval. If it feels molecule isn't yet ready for market, may call for phase IV trials

POST-MARKETING SURVEYS: Companies have to conduct continuous surveillance once drug hits market, all through the life of the drug. Serious reactions can result in drug withdrawal. Sales and marketing costs can take the entire cost of exercise right from drug discovery to development to as much as $450 million

PHARMA STOCKS: NO QUCK FIX

The way Indian pharma stocks shot through the roof of the exchanges, you would think that at least a handful of them were ready with a blockbuster molecule to take to market. What the punters probably didn't realise was that drug discovery is slightly different from making cement or writing code. Research takes its own time, and development even more. So it came as no surprise when Dr Reddy's received a pounding after news filtered in towards mid-July that Novo Nordisk had suspended clinical trials of a diabetes molecule out-licensed by the Reddy's-this, after taking it to dizzying heights on expectations of a miracle molecule. In the past two months, the stock has lost close to 20 per cent of its value At the time of writing, it was back on the buy-list. You can't keep the good doctor down.

Shilpa Nayak

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